Midstream Stocks Fall as Investors Weigh Iran Peace Deal, RBC Says
Midstream energy stocks fell sharply over the past week as oil prices tumbled and investors reacted to easing tensions in the Middle East, RBC analysts said in a note on Thursday.The Alerian MLP Index, a widely followed benchmark for pipeline and energy infrastructure companies, dropped 4.5% in the week ended June 17, underperforming the S&P 500, which gained 2.1%.The decline came as US crude oil prices fell 16% to about $76 per barrel following an Iran peace agreement that reduced concerns about potential supply disruptions. Natural gas prices were largely unchanged.Despite the recent pullback, midstream stocks remain among the stronger-performing energy sectors this year. The Alerian index is up 11.8% year-to-date, ahead of utilities and the broader market, though it trails gains in some oilfield services and exploration-and-production stocks.Companies with business models less exposed to commodity price swings held up relatively well during the selloff. Shares of Kodiak Gas Services, Archrock and MPLX outperformed the broader midstream sector.Venture Global was among the biggest losers, falling nearly 17% during the week. RBC said the decline reflected a sharp drop in European natural gas prices after the Iran agreement reduced concerns about global energy supplies.Beyond market performance, industry executives and policymakers gathered in Washington this week focused heavily on efforts to streamline federal permitting for major infrastructure projects, including pipelines, power transmission lines and facilities needed to support the rapid growth of artificial intelligence.RBC said conference attendees expressed cautious optimism that permitting reform could advance this year, citing support from clean-energy developers, technology companies, environmental groups and the administration, which has increasingly framed infrastructure development as a national security priority.Industry advocates are also pushing for changes to tax rules governing master limited partnerships to broaden investor participation and improve access to capital.Looking ahead, RBC said investors are likely to remain focused on how fluctuating oil and gas prices affect production activity, corporate earnings and future infrastructure investment plans.Price: $67.52, Change: $+0.97, Percent Change: +1.46%